An efficient finance department is at the heart of every successful business, no matter their size or industry. After all, the finance role in a business is to organise, control, and monitor financial resources, and therefor they hold the key as to whether the business sinks or swims. From scaling operations and impressing stakeholders, to positioning the company advantageously and ensuring long-term performance – none of this is possible without streamlined processes and an efficient finance department at your helm.
If you want to run an efficient finance department, you’re in luck. We’ve compiled 7 top tips for finance department efficiency that you’ll want to implement as early as today.
1. Keep Track of your Day-To-Day Finances and Cashflows
Diligent bookkeeping is the first piece of the finance department puzzle, so you’ll want to keep a clear and organised record of your business’ progress and day-to-day financial transactions. Doing so will assist you to successfully manage cash flow and stay on top of working capital. If you haven’t already, you should be digitally keeping track of this information in real-time and able to view the data at-a-glance, such as through graphs and charts. This is because digital transformation leaves little room for error when compared to the paper-based bookkeeping of the past.
2. Issue Prompt Invoices and Keep on Top of Late Payments
Since early 2020, the rate of increase in unpaid invoices has shot up 23% in the UK alone. Late payments aren’t just inconvenient for businesses; they also greatly disrupt their cash flow and can potentially leave a company with less money than they require to keep afloat. Therefore, it’s vital if you want to run and efficient finance department that you have proper debt collection and late payment monitoring processes in place. Invoices should also be sent promptly if you wish to increase your chances of clients paying within the required timeframe.
3. Keep on Top of your Tax Obligations
A successful finance department should never neglect to file tax returns or make payments on time. Keeping on top of these financial obligations prevents late fees, penalties, or added interest from crippling the company’s bottom line. This is another area where diligent bookkeeping will help you stay ahead.
4. Streamline your Employee Expense Management Processes
Tracking employee expenses the old-fashioned way may have worked in the past, but in this digital era, it simply won’t cut it. Thankfully, there are streamlined expense management solutions such as ExpenseIn, which brings everything you need to create, approve, and report on expenses into one easy-to-use package. You can access and utilise real time expense reports, make fast approval decisions with accessible data and tools, and so much more.
5. Monitor and Control Overhead Costs
Whether it’s the rent, insurance, utilities, or more – operating expenses are required to run any business and cannot be avoided. This doesn’t mean they shouldn’t be appropriately monitored and controlled, however. An efficient finance department should review these costs regularly to increase profitability.
6. Do Accounting in the Cloud
While Finance Managers are facing many challenges, managing your accounting in the cloud offers support, because it provides a secure and stable hub of data that can be accessed from anywhere. This makes it a lot easier to share this vital financial information with those who require it, such as executives and other departments within the company.
7. Use Digitally Effective Methods of Communication Among Staff
Finally, at the heart of running an efficient finance department is excellent communication – both within and outside of the team. Digital communication tools include email, internal communication platforms and intranets.